Foreclosures Are Bringing Together Families

February 13th, 2009 | Tags: Foreclosures

Foreclosures are doing a positive thing – it’s bringing together families. But the signs are more evident in some groups compared to others.

Senior Americans who are facing foreclosures and do not have the resources to start anew, are patching up with children and staying with them. Others who have been prudent have to open the doors to the younger children who have been thrown out by foreclosures. Those above 50 have been badly affected by the foreclosure crisis. According to a survey conducted by AARP over 684,000 house owners in this age group and above have been affected by foreclosures in the last half of 2007.

During the housing boom many young people bought property. Nearly 40% of the buyers of houses in 2004 to 2005 were first time nest builders according to the findings of National Association of Realtors. Most of them have gone underwater – the value of their houses being less than the loan amount. This means they cannot sell their houses and are trapped by the mortgages. Neither can they refinance nor continue with high rates of interest considering the mood of the economy and job losses. Thus a good number of the young folks are going back home to live with their parents after suffering the whiplash of foreclosures.

Rick Sharga of RealtyTrac said, “Many first-time buyers bought homes they really couldn’t afford using some of the riskier loan products (adjustable loans with low teaser rates and 100% financing). These homes… were still very much overpriced, and the combination of increased mortgage payments and depreciating home values has hit this group of buyers exceptionally hard.”

It is not just the green and young but the middle aged are also returning home to their elderly parents out of sheer necessity and force of foreclosures.

The tale of Colt Phipps is just one of many. In Arizona he had a mortgage firm but the housing crisis forced him to down shutters. His house, worth $1 million was foreclosed and this made him with his fiancé and a pair of dogs to move in with his parents. They shifted from a 5,000 square feet house to a 1,400 accommodation. He is somehow pulling along with an alternative job and helping his parents with the mortgage. But Phipps is not unhappy. He said, “It’s actually brought us closer together. It’s close quarter, but we have weekly meetings to discuss things like budget. We help out with what we can. You learn about what’s important, what’s really valuable. Things are not real value. It’s family and the people around.”